Debt-level acceptance
One thing seems clear -- people are more willing to be in
debt today than previously. Shannon Surly, 34, of Waterloo, Iowa, says, "I
am baffled to see people in my age bracket who are able to go out and buy a new
car every year, who go out and buy $250,000 houses. I think they're in debt up
to their eyeballs."

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They probably are. Paul Laviola,
a certified financial planner with Financial Planning Solutions
Inc., in Media, Pa., says, "A big problem is the easy access
to credit and credit cards. With the previous generation, getting
credit was difficult. Today it's a matter of filling out a credit
card form or going on the Internet. People are in an unimaginable
amount of debt. And not just low-income people but wealthy people,
too. All along the spectrum. And I think it's the easy access to
credit that's the driver. Before you didn't have that."

In fact, in the United States consumer debt is at
an all-time high. Certified financial planner Stacy Francis of Francis
Financial says, "The savings rate is actually negative. I know
it sounds odd. How can a savings rate be negative? But it's actually
because a lot of people are spending more than they're earning.
And the real question is: Why are we doing this? Why are we buying
things we can't necessarily afford?"

Francis
thinks two major factors lead to overspending -- power and happiness. "I
think there's a real problem with the misconception that having the power of spending
equals your value. There's almost an equation that having money plus spending
it equals power. What people can buy also really impacts their confidence."

Who, after all, hasn't gone shopping to celebrate
a good day ... or a bad one?

Second, says Francis, people still think money can
buy happiness. "The more money you have, the more you can spend,
the happier you'll be. And that's something that is definitely not
true."

Francis cites a study conducted by economist Richard
Easterlin at the University of Southern California. He found that
the amount of money people needed to make them happy was $40,000
a year. Once basic needs were met, increased money didn't really
change how happy people actually were.

As more and more goods were produced, "needs"
became more complicated and included things like telephones, hot
and cold running water, TVs and today, cell phones, iPods, high-speed
Internet and two cars. Not just a chicken in every pot, but a high-definition,
flat-panel TV with surround sound in every room. Society changed
and so did our needs, or at least our perceived needs.

"When I grew up it was, 'What did you need?'"
says Carol Noreen, 52, of Madison, Wis. "Now [young adults]
need a computer and they need a cell phone and they need digital
cable access. Where did this concept come from that these things
aren't luxuries anymore, that they're things you need to exist in
society?"

"How did we do it before having a cell
phone?" says Laviola. "I can't imagine it today. And it
seems like we're going down that slippery slope of: We need to have
a cell phone. I couldn't imagine watching TV on a black-and-white
19-inch. Can you?"

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